The reality of net capital gains and annual profit on NZ primary producing businesses: data from a recent survey of all farm types

ABSTRACT

Annual net cash returns and net capital gains provide farmers with their actual and potential monetary rewards, respectively. This article reports on a national farm survey showing both actual and potential returns, on average, are not as high as might be imagined. This is supported by the findings of earlier studies and has implications for rural societies and their associated economies. Data on income, expenses and profit is presented as is data on farm value changes over the life of each farm. The information is adjusted for inflation to provide ‘real’ data. The profit and net capital gain figures are divided into groupings based on a range of criteria such as total farm capital, and labour compliment as a reflection of farm size. Statistically significant differences occur for some groupings such as farm type and farm size.